Oil prices closed the week mixed on Friday, ending eight straight weeks of gains for US crude, as the prospect of increased Iranian oil exports eclipsed fears of potential supply disruption resulting from the Russia-Ukraine crisis.
Brent crude futures settled 57 cents, or 0.6 per cent, higher at $93.54 a barrel, while US West Texas Intermediate crude ended down 69 cents, or 0.5 per cent, on $91.07 a barrel.
Both benchmarks hit their highest levels since September 2014 on Monday, but the prospect of easing oil sanctions against Iran has weighed on the market. Brent posted a small 0.9 per cent rise in its ninth straight week of gains while WTI fell 1.7 per cent this week.
Fears over possible supply disruptions resulting from the Russian military presence at Ukraine's borders have limited losses this week. The West has threatened Russia, a top oil and gas supplier, with new sanctions if it attacks Ukraine. Russia denies planning any attacks.
Any sanctions that may be imposed on Russia by the EU should not include energy imports, Italian Prime Minister Mario Draghi said.
A senior EU official said on Friday that a US-Iranian deal to revive Iran's 2015 nuclear agreement with world powers was close but success depended on the political will of those involved.
However, the deal taking shape lays out phases of mutual steps to bring both sides back into full compliance, and the first does not include waivers on oil sanctions, diplomats said.
Consequently, there is little chance of Iranian crude returning to the market in the immediate future to ease current supply tightness, analysts said.
Reflecting the tightness in global oil supplies, the six-month backwardation for Brent crude hit its widest on record on Wednesday. Backwardation is a market structure when contracts for near-term delivery are priced higher than those for later months.
Opec+, which comprises the Organisation of the Petroleum Exporting Countries and allies including Russia, will work to integrate Iran into its oil output pact should Tehran and world powers reach agreement on reviving their nuclear deal, sources close to the group said.
Adding pressure onto WTI, US energy firms this week added four oil rigs this week, with the rig count, an indication of future production, rising to 520, its highest since April 2020, energy services firm Baker Hughes said.
